Food Stamps: Poverty’s Barometer

The fourth in a five-part special report.

As food and fuel prices rise, there’s one sure-fire way experts can chart the consequences of economic hardship: enrollment in the nation’s food stamp program.

To qualify for food stamps, people must be below or near the poverty line and have very little savings (for people 60 and older, no more than $3,000). That makes the program as good a barometer of impoverishment—and hunger—as any we have. And that gauge is rising fast.

This past May, 28.4 million Americans received food stamps, the highest level ever outside of a catastrophic disaster, such as Hurricanes Katrina and Rita in 2005. “The rising ranks of people seeking food stamps really tells you how desperate the situation is for many people,” says Jessica Bartholow, director of programs for the California Association of Food Banks.

And the desperation runs even deeper than the official numbers suggest. The food stamp program reaches only about 65 percent of all Americans who qualify. Older adults are less likely than any other age group to use the program: Of people age 60-plus who were eligible for food stamps in 2006, only 34.5 percent received them, according to the U.S. Department of Agriculture. The program reaches an even smaller percentage of older people in need, partly because Social Security benefits disqualify many from receiving more than the minimum in food stamp assistance—a scant $10 a month.

Unfortunately, even for those poor enough to qualify for the maximum benefit—$542 a month for a family of four—the food stamp program has been losing ground to rapidly rising food prices. Benefits are based in part on the Thrifty Food Plan, the USDA’s estimate of what it costs to buy a market basket of foods that represent a minimally adequate diet. The cost is determined in June, goes into effect in October and remains unchanged until the next annual adjustment.

“Especially at times of high food inflation, the adjusted numbers can quickly fall behind the actual price of food before the next adjusted levels kick in,” says Dottie Rosenbaum, senior policy analyst with the Washington nonprofit Center on Budget and Policy Priorities, which studies how fiscal policy and public programs affect low- and middle-income Americans.

Indeed, by June 2008, the cost of the food that makes up the Thrifty Food Plan’s market basket had soared 8.5 percent over the previous year. The result: Food stamp benefits fell short by $46 a month.

The purchasing power of food stamps has fallen even more for those older Americans who only qualify for the $10 minimum monthly benefit. The minimum benefit hasn’t changed since 1979, even though food prices have increased more than 160 percent since then.

For the working poor and retired people on fixed incomes, the shortfalls mean real deprivation. Many depend on food banks and meal programs to keep hunger from the door until the next paycheck or Social Security check arrives. As George Braley, senior vice president of government relations and public policy for Feeding America, a nationwide food bank network, told a congressional committee in May, “Among our clients who receive food stamps, they report that, on average, their benefits last two and a half weeks a month.”

Help on the way

Fortunately, the food stamp program, born in the wake of the Great Depression and revived by President Lyndon Johnson’s Great Society, will soon offer a far more generous helping hand. On June 18, overriding President Bush’s veto, Congress passed the Food, Conservation, and Energy Act of 2008, better known as the farm bill. Its provisions increase funding for the food stamp program and include revised policies designed to ensure that more of the neediest, particularly among older Americans, have enough to eat. “The new farm bill is historic in many ways,” says Maura Daly, vice president of government relations and advocacy for Feeding America. “Its passage represents a real victory for hungry Americans.”

The new law raises the minimum food stamp benefit and requires both the minimum and standard benefits to be adjusted each year for inflation. When the law goes into effect on Oct. 1, the minimum benefit is expected to rise immediately to $14 a month.

Another key change in the farm bill relates to retirement savings. In the past, money in individual retirement accounts (IRAs) was counted as part of an individual’s assets, a rule that disqualified many older Americans from getting food stamps. Under the new law, many retirement accounts don’t count toward the asset limit.

Even the name of the food stamp program is changing. Starting in the late 1990s, the currency-like coupons were gradually replaced by electronic transaction cards that can be swiped like debit cards, making the existing name somewhat outdated. Starting in October, the food stamp program officially becomes the Supplemental Nutrition Assistance Program, or SNAP. Experts hope that the new name, along with new policies that make it easier to apply for help, will encourage many older Americans to enroll.

SNAP, however, won’t fix all problems. Because benefits will still be indexed for inflation just once a year, they’ll continue to erode if food prices rise further. Even if food inflation next year is, say, only half of what it was this year, benefits will fall $10 shy of what it costs to buy the Thrifty Food Plan market basket by the end of 2009, according to the Center for Budget Policy and Priorities.

Still, most advocates for low-income Americans cheer the new bill. “It wasn’t all that long ago that the food stamp program was vilified as a handout to people who didn’t deserve or need it,” Rosenbaum says. “We’ve come a long way.”

Making food stamps work for more people

The next step, experts say, is to get more Americans in need to take advantage of the program. There are many reasons why so few older people sign up for food stamps. With outreach efforts tending to focus on families with children, many older people may not even know they can qualify for food stamps. Even when they do, “many seniors are afraid they’ll take away benefits from others who need them, like families with small children,” says Jane Duffield, a USDA official who works with states to help implement food stamp programs.

In fact, the food stamp program isn’t a limited resource; benefits are available to everyone who qualifies. What’s more, food benefits have a ripple effect through local and state economies. Every $5 in new food stamp benefits generates $9.20 in economic activity in communities, according to a USDA economic analysis.

Some older Americans have steered clear of the program because they don’t consider the minimum monthly benefit of $10 as worth the hassle of the paperwork involved. That could soon change. While the changes in minimum benefits and personal assets significantly increase the incentives for older Americans to apply, filling out an application will be easier, too. The new law allows states to enroll participants over the telephone, for example, which many applicants may view as less stigmatizing than going in person to a government office.

What’s more, signing up could get even easier. In Illinois the USDA is testing a pilot program called Express Stamps, which allows low-income individuals and families to enroll online for food stamp benefits at food pantries. Those who are eligible leave the pantry with their emergency food supply and a food stamp card for two months of benefits. They then can apply for longer-term benefits.

If the program pans out, food bank managers around the country are likely to embrace it. “Here in Florida, only about 50 percent of people who are eligible receive food stamp assistance,” says Dave Krepcho, executive director of the Second Harvest Food Bank of Central Florida. “That’s $165 million in benefits that are being left on the table here, and over $1 billion nationwide.”

Although food stamp benefits at their most generous represent only about $1 per person per meal, that’s more than enough to take lots of the pressure off the nation’s food banks and soup kitchens, where lines have been growing longer as food prices rise. “Right now,” Krepcho says, “we need all the help we can get.”